Main Street America Says '09 Net Income Up 83 percent

The property and casualty company's return on equity was driven primarily by a combined ratio of 97.4 and investment gains of $105.5 million, it said. The company advised this was the best single-year investment performance in its 86-year history.

Main Street America's 97.4 combined ratio marked its fourth consecutive year of achieving an underwriting profit in a very challenging p&c marketplace. The company added that the combined ratio has been under 100 for six of the previous seven years.

The company's commercial lines business, which accounts for 55 percent of its total premium, achieved a combined ratio of 92.5.

Surplus growth of $84.5 million raised the company's total surplus to $692 million.

Main Street America recorded an increase in net premium of 1.3 percent to $815 million versus an overall industry decline.

"Our financial accomplishments in 2009 position us very well against the industry," Tom Van Berkel, Main Street America's chairman, president and chief executive officer, said in a statement.

Mr. Van Berkel added, "Our balance sheet is very strong and will enable us to continue to invest in new products and new technology that makes it as easy as possible for our customers to profitably write 'Main Street' business with us. We are also extremely well-capitalized, which will allow us to continue pursuing M&A opportunities in both existing states and new states."

In a two-part video interview on YouTube, Mr. Van Berkel said while the company was able to generate good underwriting results, its performance was driven by investments. Only commercial lines came in with a combined ratio below 100 (92.5), while other lines of business were slightly over 100. A light storm season also attributed to the company's performance.

Total premium written stood at $815 million, the company said.

During the interview, Mr. Van Berkel said that one challenge the company has faced was customer retention as a "lot of companies were irresponsibly pricing their product." He said because of this, the company lost some long-term customers, but still maintained underwriting discipline.

On the mergers and acquisition front, he said the company is looking at some small mutual companies hobbled by investment losses and that the company "is getting a pretty good look at things."

For 2010, he said the combined ratio will probably rise to around 98 with an ROE in the 12-to-13 percent range. Surplus should be in the $750-to-$760 million range.

The online interview is available at www.youtube.com/user/MRFMSAG